--- title: "Fabless Semiconductors Industry" description: "60 SEC filers are classified under the Standard Industrial Classification code that describes the fabless semiconductors industry." canonical: https://www.getswoopr.com/stocks/industries/information-technology/fabless-semiconductors/ source: "Swoopr Investment: https://www.getswoopr.com" --- # Fabless Semiconductors Industry ## Direct Answer 60 SEC filers are classified under the Standard Industrial Classification code that describes the fabless semiconductors industry, and their latest annual reports show $542.8 billion of combined revenue and a median operating margin of -2.3%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics. ## Industry Overview Fabless semiconductor companies design chips and outsource manufacturing to foundries, so they avoid plant costs and focus on design and software. Results follow end-market demand, product cycles and access to foundry capacity. The first numbers to compare across companies here are revenue by end market, gross margin and R&D intensity. ## Key Industry Metrics - **Revenue by end market**: Sales divided among data center, mobile, auto and other markets. It shows which end markets drive growth and how exposed results are to cyclical consumer demand. - **Gross margin**: Revenue left after paying foundries and packaging. Without plants, margin reflects design value and wafer prices, so product mix and pricing power matter most. - **R&D intensity**: Spending on design and software as a share of revenue. High intensity is normal because chips must keep improving, so it matters whether spending produces new products. - **Inventory and purchase commitments**: Chips on hand and commitments to buy wafers. Fabless firms must commit to foundry capacity in advance, so excess stock or commitments can lead to write-downs in downturns. - **Customer concentration**: The share of revenue from a few device makers or cloud buyers. One customer's program change can move results, so a high share raises exposure. ## Primary Macro Drivers - **End-market demand**: Sales depend on demand in markets like phones, cars and servers, so end-market conditions show up in revenue by end market. - **Product cycles**: Launches of new chips drive step changes in revenue and margin, while older products fade, visible in gross margin and inventory. - **Foundry capacity and cost**: Prices and availability of wafers at outside foundries set cost of goods and ability to ship, affecting gross margin and purchase commitments. - **AI and data center growth**: Data center and AI products carry high selling prices and volume, lifting revenue and shifting mix toward higher gross margin. ## Major Risks - **Customer concentration**: A few device makers account for much revenue, so a program loss can reduce sales sharply; watch top-customer share and design-win commentary. - **Inventory corrections**: Customers and channel partners holding excess chips cut orders, so revenue can fall below end demand; watch inventory days and purchase commitments. - **Foundry dependence**: Reliance on outside foundries means limited control over capacity and price, so shortages or price hikes hit shipments and margin; watch commitments and supply commentary. - **Competition**: Rivals launch competing chips and price cuts, pressuring share and gross margin; watch research intensity and design wins. ## Industry Characteristics | Characteristic | Profile | | --- | --- | | Cyclicality | Cyclical | | Capital Intensity | Low | | Regulatory Intensity | Low | | Industry Maturity | Growth | | Geographic Importance | Global | ## Fabless Semiconductors Filers in the SEC Record 60 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification code 3674. Their latest fiscal years end between 2025 and 2026, and together they reported $542.8 billion of revenue. Median revenue growth over the prior year was 20.3%. Median operating margin was -2.3% and median net margin -1.7%. Median total liabilities were 34% of total assets, and 27 of 60 reported a profit in their latest year. | Company | Revenue | Growth | Operating margin | Net margin | Year | | --- | --- | --- | --- | --- | --- | | [Nvidia Corp](https://www.getswoopr.com/stocks/companies/nvidia/) | $215.9 billion | 65.5% | 60.4% | 55.6% | FY 2026 | | [Broadcom Inc.](https://www.getswoopr.com/stocks/companies/broadcom/) | $63.9 billion | 23.9% | 39.9% | 36.2% | FY 2025 | | [Intel Corp](https://www.getswoopr.com/stocks/companies/intel/) | $52.9 billion | -0.5% | -4.2% | -0.5% | FY 2025 | | [Micron Technology Inc](https://www.getswoopr.com/stocks/companies/micron-technology/) | $37.4 billion | 48.9% | 26.1% | 22.8% | FY 2025 | | [Advanced Micro Devices Inc](https://www.getswoopr.com/stocks/companies/advanced-micro-devices/) | $34.6 billion | 34.3% | 10.7% | 12.5% | FY 2025 | | [Applied Materials Inc](https://www.getswoopr.com/stocks/companies/applied-materials/) | $28.4 billion | 4.4% | 29.2% | 24.7% | FY 2025 | | [Texas Instruments Inc](https://www.getswoopr.com/stocks/companies/texas-instruments/) | $17.7 billion | 13.0% | 34.1% | 28.3% | FY 2025 | | [Nxp Semiconductors N.V.](https://www.getswoopr.com/stocks/companies/nxp-semiconductors/) | $12.3 billion | -2.7% | 24.8% | 16.5% | FY 2025 | The 8 largest of 60 by revenue. Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. A company's SIC code reflects its main business as the SEC records it, so it can differ from how an index provider or analyst classifies the company, and a diversified group appears under only one code. ## Where to Go Next The Fabless Semiconductors guide describes how the industry earns money, what to measure and what can go wrong. To see how it compares, read the neighbouring industries in the same sector, then apply the same checks to a specific company. ### More in Information Technology - [Information Technology sector overview](https://www.getswoopr.com/stocks/industries/information-technology/) - [Financial Software](https://www.getswoopr.com/stocks/industries/information-technology/financial-software/) - [Etch Equipment](https://www.getswoopr.com/stocks/industries/information-technology/etch-equipment/) - [Foundation Model Developers](https://www.getswoopr.com/stocks/industries/information-technology/foundation-model-developers/) - [ERP Software](https://www.getswoopr.com/stocks/industries/information-technology/erp-software/) - [Gaming Infrastructure Software](https://www.getswoopr.com/stocks/industries/information-technology/gaming-infrastructure-software/) - [Enterprise Storage](https://www.getswoopr.com/stocks/industries/information-technology/enterprise-storage/) - [GPU & AI Accelerator Semiconductors](https://www.getswoopr.com/stocks/industries/information-technology/gpu-and-ai-accelerator-semiconductors/) - [Enterprise Software](https://www.getswoopr.com/stocks/industries/information-technology/enterprise-software/) ### Put it to work - [How to analyze a stock](https://www.getswoopr.com/stocks/how-to-analyze-a-stock/) - [Fundamental analysis guides](https://www.getswoopr.com/learn/fundamental-analysis/) - [Company research](https://www.getswoopr.com/stocks/companies/) - [All industries](https://www.getswoopr.com/stocks/industries/) ## Frequently Asked Questions What are the main KPIs for the Fabless Semiconductors industry? Key performance indicators for the Fabless Semiconductors industry include: Revenue by end market, Gross margin, R&D intensity, Inventory and purchase commitments, Customer concentration. Which matter most depends on the company's model, so compare them across several companies rather than relying on one. How cyclical is the Fabless Semiconductors industry? The Fabless Semiconductors industry is cyclical, meaning its revenues and earnings tend to expand during economic expansions and contract during downturns. Investors should monitor leading economic indicators and interest rate trends when evaluating timing. What are the biggest risks in the Fabless Semiconductors industry? The primary risks for Fabless Semiconductors companies include: Customer concentration, Inventory corrections, Foundry dependence, Competition. Investors should assess each company's exposure to these factors and its track record of navigating them. **[Swoopr Editorial Team](https://www.getswoopr.com/authors/swoopr-editorial-team/)** Swoopr's editorial team produces independent investment education content reviewed for accuracy and clarity. We do not provide personalized financial advice. See our [editorial policy](https://www.getswoopr.com/legal/editorial-policy/) and [corrections policy](https://www.getswoopr.com/legal/corrections-policy/).